The Malaysian government faces tight fiscal space and the runway to keep going on as we do now is not too long or wide.
The population is still young but it will not be so much longer. This suggests growing needs for healthcare services. In the meantime, education is somewhat underfunded judging by less-than-favorable learning outcomes, compounded or caused by pandemic disruption. Defense is underfunded at a time when the world is becoming a more dangerous place; previous wasteful spending on this front does not help. Climate change requires new kinds of public infrastructure investment. Petroleum revenue is highly like to go down permanently due to rising provincialism, while an aging society means income and consumption tax revenue will struggle to rise in the next 10-20 year period. This has yet to take into account pension liability that the government faces in the same period, which is also underfunded. And, a lot of Malaysians do not have enough savings and in their old age, they will depend on public services more.
The list goes on and on to tell us that under business-as-usual, public spending requirement is rising while there is every reason to suspect that the pace of government revenue growth will not match the former.
The current government understands this and there are efforts to move away from the current business-as-usual scenario. Diesel subsidies has been partly removed (but not in Sabah and Sarawak). There are plans to abolish or at least lower petrol subsidies but that has not happened yet. Recently, the Health Ministry announced it would expand its full-paying patient scheme.[1] This is largely in line with a high-level suggestion made last year that public healthcare should be more targeted to relief fiscal pressures caused by the public health services.
And even more recently, the Prime Minister said education subsidies enjoyed by the rich is to be cut.[2] It is unclear what the actual policy is but that is for us to find out soon when the government tables its 2025 Budget later this month.
But as the government seeks to improve its fiscal conditions, it is crucial to remind Putrajaya that not all fiscal consolidation actions are of equal measures. While fiscal pressures are important and must be addressed urgently, it is not the only things that matter to this country. When it comes to cut or rationalization of public service, it is good to take a step back and reassess what we would lose in return for what we would gain not just in the short Parliament terms, but also in the long-term. After all, most of us save the unfortunate ones, live beyond the 5-year parliament term.
What we would lose from reduced access to public education and health services (and other similar services provided by the government) is the commons. It is the space where we Malaysians theoretically—really, actually for many people—come together regardless of our origins in terms of geography, class, gender, ethnicity, etc. That togetherness allows for the creation of shared lived experience or even shared identity. In an age where technology and quirks of history are leading us to live in our little bubbles, it is our public service that attempts to connect these bubbles into a larger common.
Without these commons, we Malaysians will lose connection to each other, losing whatever left of our shared values and shared identity. Erosion of these commons necessarily lead to the erosion of our togetherness.
I do not think these commons should be eroded by concerns over fiscal pressures, especially when these pressures could be alleviated through other more effective means. Instead of applying the knives to public education and public healthcare systems, other policies could be jettisoned first, like outdated incentives and reliefs provided to private healthcare service providers or private insurance, or outdated subsidies for electric vehicles. And of course, cutting petrol subsidies would go a long way too (although with crude oil prices are low these days, one wonders how long it would go).
And really, Malaysians are able to pay much more taxes. But we refuse to do so.
Our refusal points to another problem: our reluctance to make short-term sacrifices to ensure larger long-term gains and sustainability. It seems that we rather avoid the short-term pain and instead lose something valuable in the future.
[1] — Health Minister Dzulkefly Ahmad is standing by the government’s proposal to expand private wings at public hospitals as part of a hybrid model termed “Rakan KKM” (Health Ministry Friends). [Health minister defends private wings at public hospitals plan. Malaysiakini. September 24 2024]
[2] — Menjelang pembentangan Belanjawan 2025 tidak lama lagi, Anwar Ibrahim menghantar ‘isyarat’ yang menunjukkan kerajaan sedang meneliti pengagihan subsidi pendidikan kepada rakyat negara ini. Berucap di Putrajaya hari ini, perdana menteri berkata, kerajaan mahu memastikan subsidi sebegitu disalurkan kepada golongan yang benar-benar layak saja.[Golongan kaya mungkin tak lagi dapat subsidi pendidikan. Malaysiakini. Accessed March 31 2024]